ELECTRIC AUTOMOTIVE INDUSTRY ANALYSIS Electric automobile industry and problems faced by the electric vehicle segment in India

Executive Summary (Literature review) A nations competitiveness depends on the capacity of its industry to innovate and upgrade.1 Michael E. Porter This analysis focuses on the automotive industry, specifically, large-scale manufacturers of automobiles. The automotive industry is inherently interesting: it is massive, it is competitive, and it is expected to undergo major restructuring in the near future due to globalization and decreasing oil reserves. There are many newly founded renewable energy sources automobile are available like electronic battery cars, solar energy, bio fuel, hydrogen cars etc are available in the very introductory stage. But still they are facing so many problems due to several reasons and disadvantages of technical problems. About the Indian automotive industry The Indian automobile industry took an extraordinary leap in 1982, when the Indian government And Suzuki Motors, Japan, concluded a partnership to form Maruti Udyog Limited (MUL), for mass production of smaller, cheaper and fuel-efficient cars to capture the middle class. The First car that came into market was Maruti 800 (M800), priced at about INR 48,000 and it became an instant hit. During the period, to provide impetus to the industry, Government of India eased regulations and norms for licensing and capacity expansion. Currently in India there is large number of players available like Ashook Leyland, Force Motors, Piaggio, Swaraj Mazda, Eicher, Honda SIEL, MARUTI SUZIKI, TATA MOTORS, HERO GROUP, Bajaj Auto, M&M, GM, FIAT, SKODA, Volkswagen, Renault Nissan, Hindustan Motors, International Auto, Ford, Toyota, Volvo, TVS, Hyundai, Kirloskar, Royal Enfield, BMW, and Bosch. The whole automobile industry is divided into four region as per their production plant is located like north, south, west, east. As per the market size of 57.7 billion USD, India has great advantage of the 1 Porter E. Michael, The Competitive Advantage of Nations, Harvard Business Review, March 1990 Society for Indian Automobile Manufactures (SIAM 2011)

booming small & fuel efficient cars. There are rising in the income & changing pattern of expenditure of Indian people will create large benefits for automakers. India is aim at global R&D as well manufacturing hub in coming decade. Automobile industry predicts market size up to 145billion USD in 2016.the Indian automobile segment spilt into four categories. 1) Two wheelers mopeds, scooters, motorcycles, electric vehicle 2) Passenger vehicle passenger cars, utility vehicles, multi purpose vehicles, electric cars 3) Commercial vehicle light commercial vehicle, heavy & medium commercial vehicle 4) Three wheelers passenger carriers, goods carriers Below graph shows the market share of all four categories:

Domestic market share for 2010 2011 category Passenger vehicles Commercial vehicles Three vehicles Two wheelers Market share (%) 16.7 4..4 3.4 74.40

Source: Society for Indian Automobile Manufactures (SIAM) There is large market for the two wheelers & passenger vehicles but merely the 1% of electric two wheeler market & 2 to 3 % of electric car market.

Electronic vehicles industries in India Indian scenario for the electric vehicles: At the moment demand for EV in India is quite small by industry estimates, less than 5% of the passenger car market in India would comprise of electric cars over the next 5-7 years; at 1,75,000 units. Apart from Reva EV, Toyota has launched Prius hybrid. These are the only two EV/HEV cars commercially sold in India. Reva, Indian electric car manufacturer, sells most of its cars in the European market Honda Siel Cars India had to withdraw the Civic hybrid from the Indian market within months of its launch in 2008 .Indica electric from Tata Motors, is expected to debut in Norway, Denmark and the UK towards the end of 2011. Electric vehicle (EV) market in India is at a nascent stage and is expected to grow by 45% over 2008-09 and 2009-10 Comprises of electric cars, three wheelers and electric two-wheelers Electric two-wheelers dominate the market with 97.5% of the EV market Increasing demand for green cars in foreign market Manufacturers providing incentives to attract consumer. Major driver & challenge: Drivers: Increasing crude oil prices, Low maintenance cost, Increasing demand for green cars in foreign market, Manufacturers providing incentives to attract consumer Challenges: High price, Lack of supply of spare parts, Government Initiatives, Charging infrastructure, Lack of optimum business models Trends towards electronic automobile market: Growing number of market participants are entering the market, Automobile firms are launching EV version of conventional car models , Increase in number of joint ventures, mergers and acquisitions, EV players are seeking carbon credits Major players Indian electric auto sector: Most of the players operate in the electric two wheeler segment only one company operates in the electric car segment Reva electric car company Electrotherm motor limited Hero electric ltd BSA motors limited

Research variable: Electric automobile manufacturer and government initiatives towards electric vehicle Research gap: India is emerging as large automobile market but still there is a lack of electric vehicle awareness and trends in Indian market

Research Objectives:
Why electric automobile industry is facing problems in India. Government initiative and approval towards EVs & other automobile players